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FOX Business After the Bell

News/Business. Stock market updates. New.

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01:00:00

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480

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Us 12, S&p 6, Peter Barnes 6, Jason 5, Ibm 5, Polaris 4, Cme 4, Plosser 4, Advair 4, Michael Kors 3, Charles Plosser 3, Lifelock 3, Virginia 3, Scott 3, U.s. 3, Spain 3, Philadelphia 3, Caterpillar 3, Bernanke 2, Gethelp 2,
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  FOX Business    FOX Business After the Bell    News/Business. Stock  
   market updates. New.  

    September 25, 2012
    4:00 - 5:00pm EDT  

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today. >> reporter: that's right. a third in five days, and that's because we saw carnival, safeway, disney just showing a very resilient consumer in tough economic times. david: even though we're looking at it, again, going down a little bit, but it was an all-time high today. liz: here we go with the closing bell on wall street, eight seconds to go on a rough day despite the fact that we got decent housing data out of that case-shiller index. here are the final numbers, dow falling nearly 100 points. again, the foster effect, he spoke to our own peter barnes, and he basically did not support what the fed is doing. doesn't think it's going to cause growth of the nasdaq, down one and a third percent. the smaller and mid cap names down 1.5%. david: whenever you're talking about the federal reserve board, you always look at what the dollar's doing and gold. look at that, when gold goes down, it's very up because the dollar is strengthening, and, of course, if crosser says there
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shouldn't be more money printing, that weakens gold. you look at the middle of the screen, you see it going down, it never recovered after those statements came out. liz: today's selloff was mirrored by a rally in the u.s. dollar which strengthened once again and, listen, usually when the fed gets involve, that's dollar negative. not this time. against the euro,1.29.07. david: peter barnes is going to be joining us this hour to tell us more details on his interview, but caterpillar, first time you heard it here that caterpillar was going to be hit, it brought down some other stocks along with it, joy global and terex, both stocks slid as a result of caterpillar going on. they went in tandem.liz what's the show without a mention of apple? we've got to talk about apple. it may have taken the spotlight lately, but google continuing to
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shine a bit more brightly. google today hitting an all-time intraday high. capstone putting a $910 price target on the name saying this is the best and the brightest of america at this company. david: all right. but again, ended down for the day as stocks began to slide. and look at this, we do have a triple-digit loss on the dow. stocks once again unable to hold on to gains, so is the september rally finally done? we've got two top fund managers, also peter barnes sitting down exclusively with philadelphia's fed, why the fed made the wrong decision. liz: and one fund manager says forget the pe ratio, price to earnings? there's actually a better way, he believes, to value stocks, and it has helped his fund rally 19% every year for the past three years. he'll tell you what it is, you can't miss that. david: a lot coming up, but first, we want to tell you what drove the markets today with today's data download. stocks ending seriously in the
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red, new session lows, in fact. hawkish comments by a member of the federal reserve sparked today's afternoon sell off, all ten s&p sectors closed in the red led by materials and technology. the s&p case-shiller index rose to its highest level in nearly two years. prices are up 1.2% above analyst expectations, july marking the fourth straight month of gains for home prices. consumer confidence rose to a seven-month high in september after falling last month. the index was up nine points in september climbing to 70.3. david: scott bauer, he's a brave soul, he's in the thick of the pits at the cme. jason pride tells us why you should buy on weakness, not be scaredy cats, and dan gender says it's time to look at what he calls protective equity. let's start with scott at the cme. i guess the bulls couldn't quite hang on today, could they? >> no. you know, we had that good news
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this morning, saw the s&p's up, but there was really an aberration this morning. when the markets are down, the s&p was at its highs this morning. the vixx, the fear index, was also up. now, those usually go opposite one another. but the vixx was up this morning with the market up. that was, you know, a real indicator that something in the marketplace was going on. now, who knew that we were going to get these comments from plosser, the riots or whatever it is in spain, but that to me was early this morning, and to a lot of these traders was an indicator that we may have been in for, you know, a little bit of a selloff. david: great point. terrific point, scott. i just want to hit on oil before we go further because we've given that short trip, it was a few weeks back right during the last hurricane, in fact, that you said oil, barring another hurricane, was going to go down to the $90 level and below. you were right. what happens now? >> well, you know, we're hovering right there, and it looks to me like probably 88, 87
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is the next stop. you know, who knew why it ran up to the 100 and then had that quick selloff, but this is really with what's going on in the economy and the news coming out now, you know, this -- it's not good. if we don't grow, this is not good for oil. it's good for everybody else, it's great. liz: right. >> i would say sell at 90 by next week. david: scott, we want to bring in jason pride and dan getter in, he is the ceo of rnc. gents, good to see you. thank you for both. jason, first to you. you think that the economic backdrop in america right now is getting better. why? >> so we see some improvement in the leading economic indicators which are primary modes of watching economic activity, but that improvement is rather weak at this point in time. you know, this rally that we've seen is really on the back of hopes and aspirations concerning what the central banks are
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doing, and it has been, actually, a little bit premature relative to what we've done in the past couple cycles. so perhaps we'll take a little bit of a breather here and long term settle into a little more robust economic cycle. liz: dan, i want your perspective here, and i know that you have felt in the past it's important to buy the weakness. do you still feel that way, and would you consider today a moment in time that would fit into that parameter? >> yeah, i do. i think you should still buy into the weakness here, liz. i think overall probably the most compelling reason to that is there's probably very limited downside. there's a lot of support at 100, there's -- 1400, also significant support at 1370, so you have about 5% of downside. that's the good news. the bad news is there's really a lot riding on the election, and we're not going to have any clarity on earnings for the next several weeks, so we're going to be in a little bit of a state of limbo after being up almost 6% -- liz: could i interrupt you? did you buy on a day like today?
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were you out there buying? >> yeah, we were buying. and i think you're going to see more buying, more support largely because a lot of professional investment advisers have missed this market. they've had high cash positions, and now they need to get back into the game. you're probably going to see a little support tomorrow and the next day because we're coming to the end of the quarter, and they don't want to send out reports to clients with 10, 15% cash. david: jason, i've got a lot of cash, i know a lot of people out there have a lot of cash because there's supposed to be about $2 trillion on the sidelines. what do can you do? do you hold? we have had this tremendous runup over the past few months since june. do you hold your cash and wait for a further drawdown of the market as we saw it today before you use that cash? >> we think you take time positioning your cash into riskier assets. by saying that, we think there's a significant difference between the different type of risk assets that sit out there. the full boat, you know, tradition aleck bities are considerably higher risk and
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unlikely to produce only kind of meager results through the longer-term time frame of slower economic growth. meanwhile, cash in fixed income is going to likely underperform inflation. that means taking more risk in fixed income, high-yield sort of bonds, taking less risk in equities, higher quality dividend growth equity strategies and basically doing anything you can to pull out a little bit of extra return without taking undo can risk. liz: let's just expound upon that, jason, two names you really like that fit into, you like philip morris. not a health care stock. [laughter] yeah. not a health care stock. but we'll take palmolive, definitely a consumer-oriented name. you feel they're strock. strong. >> so, basically, both of these situations is we're trying to position conservatively in equities while taking more risk in fixed income. less risk in equities means you go from able earnings and
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dividend growth companies, ones that have an underlying ability to generate returns on capitol. they are global growth stories, and they have fantastic margins on their businesses. david: dan, you've got a variety of picks including some real health care stocks, metlife, for example. tell us about these. >> well, i think for resident what you're looking at is we're certainly in a position to where health care is going to expand whether we want it or not. we're going to have some form of obamacare, it's going to continue to expabled. you've got a company with about 1% of ondoing -- 12% of ongoing growth. all of their units are growing quite well, and it's going to be something that's going to continue to be on the leading edge of that cycle. if you look at the financials, clearly, the banks are doing well, getting a little worried about a few of the banks. if you look at metlife, they've been somewhat held back because they're mainly an insurance
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company, obviously, but they're also tied up with the banks and with t.a.r.p. because they have a small banking operate. they're about to sell that off to ge, and that's going to be a metamorphosis for them. they're going to go into a stock buyback program, probably increase their dividend probably from two to three, and we think there's a tremendous amount of upside, and it's going to ride, you know, some of that wave forward. liz: folks, that's an important tip that he just gave you. possibly once they sell off their banking part, they may then up their dividend. thank you for that. dan and jason, thank you both. david: thanks, gentlemen, appreciate it. when we come back, the battle wages on within the fed on whether or not the latest round of quantitative easing should have been implemented. our own peter barnes talking exclusively with philadelphia fed president charles plosser. his talk with plosser actually moved the markets today. what more did he say that may move the markets tomorrow? we'll be asking peter coming up. liz: plus, one fund manager says
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the end of an era is coming, the end of the era where you look to price to earnings ratios to buy a stock. no, no, no, there's a new indicator he says is out there that you should absolutely be using to buy stocks. he'll tell you what it is straight aheld. david: also, toys r us looking to hire thousands of workers. some companies are hiring, folks. we'll tell you why toys r us is doing it coming up on "after the bell." ♪ [ male announcer ] what if you had thermal night-vision goggles,
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david: s&p futures are closing right now, let's go back to scott bauer at the cme. scott, question: will this slide continue? >> i'm not really sure. i think overnight we'll digest what happens in spain. i think plosser's comments are probably just out there, and that's already suggested in the market. let's see what happens in spain. i would actually expect a little bit of a rebound tomorrow morning.
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liz: spanish yields ticking up a little bit, showing some stress, right? they had a bond auction, italy and spanish yields didn't look so good. >> no, not at all. but, you know, again, i think what really spooked the market was when everybody was, you know, the media was showing on tv all these protests, all the unrest with this, the big decision coming up on thursday. i think that put a little fear back in -- david: two, one, zero. that's the end of the trading day at the cme. scott, thank you very much. liz: he's happy for that finish, i'm sure. thanks, scott. michael kors, right? the designer? this company's done unbelievably well since its ipo. let's head back to nicole for the bigger and bigger, i guess, more important story. >> reporter: yeah. the bigger picture is that michael kors continues to do very well. you do see a down arrow today of 4%. secondary offering goes well. let's back it up and talk about the fact that year to date the stock is up 92%.
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each time that they initiate with more shares, they're getting them out there, there's still demand there, and what we're seeing is the founder and namesake, michael kors, continues to make millions out of this process. so on monday evening b the company placed its second public offering of shares and up 165% from the ipo price. so they continue to do so well, and we get their sales numbers, and they continue to grow. david: all right, nicole, thank you very much. well, this was the story. if there's any one issue that led to that gain in the dow leading to a triple-point loss, it was the fed's divisions between the monetary hawks and doves which got a little sharper today with another fed president speaking out against the latest round of easing. liz: to fox business, our very own peter barnes sat down with philadelphia federal reserve president charles plosser this time in a fox business exclusive, and that actually moved the markets today. peter? >> reporter: that's right, david and liz, and that's
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because president plosser here raised questions about the effectiveness of the latest round of want tative easing -- quantity quantitative easing and the other steps the fed voted to approve two weeks ago here. he argued they wouldn't have that big of an impact on interest rates, driving them lower and, thus, might not have as big an impact on employment and job creation and on economic growth. he also said that he is concerned that all of this additional stimulus could lay the groundwork for problems with unwinding all this at some point and also with inflation down the road. take a listen. ♪ >> well, the risk is higher inflation. that is, if we get to a situation where we have to begin tightening policy -- and someday that will come to pass, some people think it may be sooner rather than later, but whatever concern when it comes time to do that, will we find ourselves in a situation where inflation gets
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too far ahead of us, and we lose the anchored expectations that we rely so haley on? heavily on? >> reporter: he said the main problem with the economy right now and job creation is all the uncertainty out there with the election coming up and the fiscal cliff unresolved in washington and, also, the problems in trying to fix the european debt crisis. david and liz. david: peter, what i found extraordinary was he actually came out specifically against that 2015 figure saying that the fed is going to have to raise rates before 2015, most likely it will do that. now, richard fisher's been on this program many times with criticisms but has never been that specific. these are the most specific criticisms of the last qe that i've ever seen. >> reporter: yeah, i would agree. and, listen, this was a very beefy, meaty speech by president plosser. it was 11 pages. it was full of policy, a lot of
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academic arguments as well on why this may or may not work. he momentum think it will -- he doesn't think it will. and, of course, he is very concerned about inflation, he is an inflation hawk, so he wanted to make sure that he laid down his marker once again in this debate as it goes forward, and he also wants to talk to the public about the possible risks of all this to help them navigate all this down the road. liz: and it is a debate because boston fed's president gave you an exclusive interview a week ago, and in the essence he said, quote: qe will help. i think it'll have a material impact, and there are a number of ways it can happen, one is the housing market. and he went on to articulate that. frankly, peter, the facts bear out, housing market's looking a little better. >> reporter: that's right. and we're seeing these deep divisions about whether or not this all will work. now, the boston fed president pointed out on the day of the
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fed's announcement two weeks ago mortgage rates did go down, and we saw that reflected, actually, in some of the mortgage data that day and later on subsequent to that, and he said that part of the strategy here is that they want to try to encourage people to jump into the housing market. he said you want to catch interest rates while the fed is promising to keep them low, while prices -- housing prices are going up. we saw that in the case-shiller index today. quote: you want to catch it while rates are low, prices are going up so there's a cost in delaying. he said that's the behavior that they're trying to encourage here to try and help get the economy going again and the housing market, of course, in particular. liz: good work, peter. david: it is a fascinating war of words between the doves and the hawks inside the fed, and our man, peter barnes, has been there for it all. good stuff, good reporting. regulation nation, all the new rules of obamacare still respect clear, but those rules may be turned completely upside down by the next election. so how does a hostile
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administrator -- hospital administrator plan and manage for the future when the future is so uncertain? we're going to be asking the executive of one of the nation's largest hospitals coming right up. liz: plus, one fund manager says it is time, people, to forget the age-old price to earnings ratio when valuing a stock. he believes there's a new measure that's helped his fund gain 19% every year for the past three years. david: wow. liz: we'll tell you what it is and how to look for it, straight ahead. ♪ copd makes it hard to breathe,
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liz: okay, we need you to quickly look at this because today's markets did something that we often don't see, and, you know, steep drops. the dow posted it biggest percentage drop since august,
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the s&p, it posted its biggest drop since june 25th, so these were slightly watershed. we don't want to overdramatickize things, but let's do it anyway. the nasdaq saw its biggest drop since july, but all three indices up more than 20% over the past year. david: yeah, but it was not a good day today, and it's time for a quick speed read of the other news. first up, adt corporate and pentair are set to join the s&p 500, taking educational services provider dem ri's spot. meanwhile, toys r us plans to hire 45,000 seasonal employees across the country this holiday season. the retailer said hiring is going to begin this week for managerial and sales associate positions. tesla unveiling a solar-powered charging session that will speed up refueling. the stations are designed to fully charge the new model s sedan in about an hour. the roadside supercharger has
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been installed at six places in california. rimm says its numbers of users has climbed to 85 million from 78 million -- 80 million from 78 million. most analysts had expected them to lose shares. a new arena will be built near the seahawks and their hers' stadiums, and that is today's speed read. liz: he did not make it. david: i made it. i made it. [laughter] you heard, didn't you? liz: i'll tell you what we heard was the sound from central banks, they are pumping more money into the system as concern over slowing global growth does continue to mount. david: and we have a strategist who says investors will be left dealing with the consequences for years to come. joining us now, brian railing, wells fargo chief fixed income strategist. first of all, we've got to talk about plosser's comments today, the fed president from philadelphia.
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he was, essentially, pouring cold water over qe3. is this going to have a lasting effect on the markets, his comments? >> i don't think it'll are is a lasting effect. i mean, bernanke's clearly in control of the fomc, and he has the voting bloc on his side. so -- david: but it is an interesting split, is it not? i've never seen a split as out in front. usually, people have their disagreements behind closed doors. >> yeah. they're definitely getting more vocal on the objections to quantitative easing and bernanke's policies, that's for sure. liz: okay. so let me just push back on you here. we can sit here and rail against the fed all we want, but we are also a business network trying to make people money, and the trade is what it is. how do you view it, brian, and how do people make money off it? obviously, they have to stay on their toes and watch because it's a fluid situation, but what is your focus and what is your thought right now when it comes to investing? >> you know, my take is, you know, other the next 12-18 months that, you know, the fed
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is going to be pump liquidity into the market, so risk-based as sets are poised to do well. if you see a pull back, i think equities will do well within the fixed income markets, the credit markets, i think, will continue to outperform the government markets. david: now, brian, it is true that the housing market has improved somewhat, but i'm just wondering how much the fed had to do with that. if you lower interest rates a couple of tenths of a percent which is what has been happening over the past couple of months, does that really motivate people to go out and buy new properties and borrow money for new projects and expansion? >> yeah, you know, i think if you look back, i think qe1 and qe2 had a bigger impact. david: exactly. >> ten-year interest rates are below where they were in the depths of the financial crisis, so they did have a material impact bringing interest rates down. qe3, i think, is debatable whether it's going to have much of an impact, but nonetheless,
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they're going to go full steam ahead. liz: where in fixed income land is there opportunity that you see right now, brian? >> you know, we continue to focus on the credit markets, so whether it's corporates, high-yield, the one thing i would caution, of course, in this very low interest rate environment, you know, you don't want to lock in that fixed income stream for a significant number of years. so definitely want to side to the intermediate -- liz: so not 30-year treasuries kind of thing. >> exactly. david: how about municipal bonds? everybody was freaking out a few months ago after meredith whitney's statement that there were going to be all those defaults. there have been a couple of notable ones. some people went into moody's, did pretty well on that. are you still interested in that market? >> i think so. munis still offer value. obviously, overall all fixed income has gotten expensive, but
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within munis we don't see the bankruptcies out in california, you know, turning into a nationwide trend. so comet to buy the better quality there -- so continue to buy the were the quality, but still think there's value there for investors. liz: brian, good to see you, thank you so much. wells fargo chief fixed income strategist. david: thanks, brian. coming up, how do you manage and plan for one of the biggest hospitals in the world when the election could overturn automatic rules and regulations of our new health care law? we're going to be asking one of the top executives of new york presbyterian hospital coming right up. liz: plus, we've got a fund manager who says, forget it, the old way is not the new way. his fund is up nearly 20% annually, he's going to tell us his metric and what's in it, coming up. ♪ [ owner ] i need to expand
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david: running a big poll tan hospital is tough enough in good times. a lot of patients out of work and rules and regulations that are changing every day the job is almost impossible. nevertheless our next guest soldiers on at one of the nation's biggest most modern hospitals. what are the immediate challenges and how could that affect all of us at patients. let's ask the former president and ceo of new york presbyterian hospital and current vice president and chairman of the board of trustees. you still have a lot of skin in the game. you're there all the time. the new health care law, let's talk about that first. does it make it easier or more difficult to run a hospital? >> there are pluses and minuses to it. there are very good things the new law does and in the right direction. it puts more pressure on the health care providers but i think that is appropriate. that is one way of improving quality and getting cost
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out. david: do you understand the new rules? i remember when it was being created, nancy pelosi said first you have to pass it and then figure out what is in it. is it difficult to figure out what all the wording means? >> it is extraordinarily complex. a lot we know because we paid attention to some of the major issues. there are pluses and minuses into those things. there are ways to improving quality, reducing costs. one of the most important issues is reducing readmissions within certain days. there is good intention in that. we can accomplish things. the way it is being carried out needs some correction, the question is how effectively will the government come to fix the corrections. >> we already know one thing that didn't turn out to be. we had promises premiums would go down as a result of this. the president said we'll work with you to lower your premiums by $2500. we'll not wait 20 years from now to do it or 10 years from now to do it. we'll do it by end of my first term as president. it is end. first year. guess what?
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premiums have gone up $3,000. are they going up further? >> i think in fairness to him, i'm not into the politics of this. david: right. >> the kind of corrections and reforms he is asking to be done have not taken full effect yet. so it is hard to judge what the definitive story will be. so i can't talk to his statement or anybody else's refute. my feeling we're seeing some things happening which could reduce costs. i think there are other things we could do. david: one of the reforms never put into obamacare is tort reform. there is some kind of, a couple of million dollar pilot programs but nothing substantive put into health care reform. >> right. david: what would you like regarding tort reform and frivolous lawsuits to be put in the health care law? >> i would like something like medical courts. i would like to have limits how much one can get. i think we should have suits be done more rapidly. you should not compromise the ability of a person who has been hurt by health care to get some kind of recompense but it is way out of bound. we ought to have people who
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bring suits and lose them. have responsibility. david: that is the british health care system. i have some experience. i spent a month in a british it hospital with my wife. the only good thing about british health care, it was messy awful hospital compared to any i've been to in the united states but they have 1/10 as many malpractice suits. because the loser pays. if you bring a frivolous lawsuit you have to pay. should we have the system here. >> i think so. we have number of corrections to make. wouldn't hurt the person who had the hurt if you will. might take a little bit, a few dollars out of the lawyers revenues from that but it's the right way to go. if you have courts which are professional courts that know what they're doing and sort out the questionable claims from the real claims that would be a big help. the other aspect just to say. david: sure. >> you both get reduction in premiums and get less defensive medicine which is extremely costly. david: a lot of these things are keeping a lot of doctors out of practice. some people are pulling in
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their shingles. they're leaving practice entirely. a lot of people who might have thought about many billioning doctors are not becoming doctors. we have a terrible shortage. look at this, $130,000 short by 2015. that is only couple years away. >> i think illustrates, about 125,000 short by 2025. david: still think, we're having 30 million more people insured. we will need more doctors, not less. >> couldn't agree more. 10 million people a year, 10 million people a day are going on to medicare or 10,000 people a day going on to medicare. just to your point. we'll need more doctors. they're already a problem for medicare patients to find doctors to take care of them. we should support doctor training. making sure we have as many people out there as possible. one thing i would say, surprisingly, perhaps, there are still tremendous number of outstanding young people who want to come into medicine. very ideal listic. i'm enthused about that. david: we to wrap it very
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quickly. if we overturn obamacare you guys will have to go you there the whole thing again trying to refigure out what the politicians want. >> it is a formidable thing. let me say this. first of all mr. romney said he embraces some aspects. not that many but some. second i think the healthiest thing to come out of this, whatever the results of the election, is that these two leaders and parties really get to work together. if we get to work together and ask those of us in the field to help, we can cut costs and improve quality. david: dr. herbert partis, presbyterian hospital. you do herculean labor. liz: great stuff. it appears the fcc, the federal communications starting to back away from all the indecency complaints after a series of courts smackdowns. could more riskier programing be on wait, more four-letter words? stay tuned. ♪
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david: here's your fox business brief. wall street closing at session lows today despite encouraging reports from the u.s. economy. hawkish comments from philly fed president charles plosser. this marks the worst day for stocks so far this month. >> the british banking association will hand over responsibility to regulators if deemed necessary. they will support the recommendations from the financial services authority, martin wheatley who is expected unveil a new regulatory libor structure later this week. after 75 years smith barney is retiring from wall street. the venable brokerage firm name is being dropped by new owner morgan stanley. it is using its own morgan stanley wealth management. that's the latest from the fox business network, giving you the power to prosper. we will return in just a second.
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liz: breaking news. it involves a stock you may own in your portfolio. ibm, the ceo, virginia rometti has been named by ibm board of directors to chairman of the board. her appointment would be effective october 1st of 2012. the current chairman, sam palmisano who ran the company for many years very successfully. he will be a senior advisor to the company until he official officially retires on 2012. palmisano retiring january 1st of the year. rometty becoming chairman of the board. she has been at ibm since 1991. she joined after being a general motors institute engineering student. northwestern, first woman ever to run ibm. so, a real trailblazer there for virginia rometty. typically, let's get to this story, investors look to price to earnings, p-e ratio or price to book value
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when picking things like stocks but we have one money manager who invested in small cap stocks based on a different strategy and his fund has really done well, gaining 19.4% annually over past three years, not just one year. the t. rowe price director of quantitative equity research joining me right now. let's get right to it. people have been waiting an hour to hear what you use as the better metric versus price to, ratio. >> i prefer to use free cash flow yield and free cash flow estimates for valuation. we find free cash flow yield is better predictor of outperformance than peo price to book multiple. second forms which have high cash flow generation they can sustain growth for a longer period without having to raise capital by issuing stock or issuing debt. third, that free cash flow metrics are, more difficult to manipulate than
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accounting earnings numbers. and finally, companies with high free cash flow yield and high free cash flow tend to be attractive takeover targets. you find a lot of lbo investors tend to target such companies. liz: let's point out too, you run the t. rowe price diversified small-cap fund and symbol is prdsx. obviously small caps tend to be more attractive targets when it comes to things like takeovers but, you know, picking cash flow, what is it about cash flow? obviously you get a sense the company is making money. let's cut it down to what it is. but how about something like price to book or book value based on both assets and liabilitis? that is what warren buffett uses. >> at some point in larger company i think price to book is appropriate metric and at different points in the economic cycle especially coming out of recessions price to book might be an attractive metric. we tend to invest in companies which can grow
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over long periods and sustainable growth in sales and earnings per share and for that, we find that free, companies that produce high free cash flows that they tend to be able to sustain earnings and cash flows for a longer period of time. liz: let me jump in because i really want to get to the three picks and people are waiting for what fits into your metric the first one is a company called, polaris. by the way, all these three have done extraordinarily well over the past year but i'm assuming that you think polaris has more room to run beyond the 60% year-over-year that it has enjoyed? >> i think that's true. it is not particularly treat but it has been a pretty attractive stock and we owned it for a long time. polaris makes all-terrain vehicles and snowmobiles and maybes motorcycles. what is important about this firm, they have high return on equity. that is something we like in our investments. they have over the last 10 years bought back about 15 to 20% of their stock which is another attractive
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characteric of the stock. they have good free cash flow generation. liz: there it is, the cash flow. i actually use a polaris for the first time this summer and i have to tell you, a 10-year-old could do it. they are so solid. they will go over all kind -- really lots of fun. and no, i didn't let my 10-year-old, use it, david. i swear i didn't. your next pick is gartner. you would call this is technology stock. again it falls into the better cash flow. it is up 35% year-over-year. >> yeah, gartner provides i.t. services which are technology analysis which is used by chief technology officers and i.t. departments. and it is a way to invest in the technology sector without dealing with the product risk of individual companies that tend to be cyclical, like technology stocks but much less cyclical i would say. again they have, it is a back door way of investing in individual technology stocks. liz: all good ideas. thank you. his third pick, maximus
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health care. thanks for joining us to talk about cash flow versus price to earnings. always different ideas on the show. thank you. >> thank you. david: hard to argue with with the success rate. the fcc may be backing down on indecency charges. will this pave a way for even more raunchchyer media? if you can imagine that. we have the story next [ engine revving ]
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financial services.
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liz: the federal communications commission reportedly scaling back enforcement of indecent charges. david: the staff is asking them to focus on most explicit complaints. fox's dennis kneale has the details. >> want to talk to you about smut, profane, fleshy fare proliferated on basic cable channels such as fox's fx. pay channels like hbo. life is different for the broadcast networks such as fox broadcasting our sibling. the fcc went to investigate a strip club scene in the fox cartoon series, "the simpsons." now homer simpson can rest easy and
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janet jackson and cher and nicole richie other past targets of the sec war on broadcast smut. telling the wrap.on will stop pursuing 1.5 million indecent complaints they were investigating and focus on fewer complaints and pursue the most egregious cases. the fcc war on indecent began in '04 with the janet jackson case. it fined cbs $550,000 but a federal court threw out the fine twice and u.s. supreme court in june let the ruling stand. the supremes rejecting fcc fines against fox for spontaneous f words uttered by cher and nicole richie way back in '03 and '04 and threw out fines for abc exposing viewers of "nypd blue" to the bare dierre, an actress. not the dierere of detective siplitz.
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they dropped charges against fox on the on show on married in america. which aerd in 200. fcc had enough. it is signaling surrender. >> yeah, four-letter words and nudity. yeah. ratings. >> what are you going to do? david: thanks, dennis. well the brain that revolutionized physics can now be downloaded for just 10 bucks. we'll tell you how you can literally take an inside look at the mind of albert einstein when we go "off the desk." that is straight ahead so... [ gasps ]
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plus get this document shredder free-- but only if you act right now. call the number on your screen now! liz: igm on the move moving higher in the after-market. sam palmisano and current chairman and former ceo of ibm will take on a consulting role and he will step down officially and retire at end of this year, once again the virginia row meti, chairman of the board of ibm. time to take it "off the desk." not your average cup of joe, david. blossom coffee unveiled a brand new limited edition, handcrafted coffee machines they say will brew the perfect cup. david: let's see it. liz: the team that designed the machine, here it is with workers with prior experience from bmw, apple,